Hanoi apartment for sale market on the rise

According to the CBRE Quarter 4, 2014 report released on January 6, the wave of new launches in apartments for sale in Hanoi continued strongly. A total of 7,200 units were added to the Hanoi supply from 16 projects, most of which were in the mid- and low-end segments, pushing total new supply for last year to 16,200 units, or more than double the 7,900 units launched in all of 2013.

Sales momentum continued firmly and steadily. The market absorbed an estimated 3,990 units in this quarter alone, which was up 47 per cent against the previous quarter. Mid-end apartments fared the best, accounting for 48 per cent of units sold. Low-end transactions followed, at 37 per cent of total transactions. In total, 10,700 units were sold in 2014, which was a 60 per cent increase over 2013.

In terms of pricing, properties in the core urban districts continued to be sought after and retained high indicative prices. On average, primary prices of projects in these locations have increased by approximately 10-20 per cent compared to last year. In the low-end segment, newly-launched units were also released at a price tag approximately 5-10 per cent higher than units launched earlier in the year.

According to the report, prices of resale apartments increased slightly, by 0.4 per cent quarter-on-quarter (q-o-q). Resale prices improved in most segments, with the strongest being in high-end apartments, at 2.2 per cent q-o-q. On a year-on-year (y-o-y) basis, luxury and high-end apartments fared better, with 4 per cent and 6.7 per cent growth, respectively, while mid-end and low-end apartments’ resale prices saw a decrease.

This is because the supply of luxury and high-end projects is diminishing, while the market is seeing more supply of mid- and low-end apartments, especially massive low-end projects offering small units at good prices.

Moving forward, it is expected that the market will continue to look positive in 2015. “Sales are expected to remain strong, while more new launches from new projects and re-started projects will be released to the market, especially in the first half of 2015,” said Mr. Richard Leech, Executive Director of CBRE Vietnam. Luxury and high-end products will be sough after, as stock for these products is diminishing. “While foreign ownership is expected to stimulate demand, activities on this front will be slow in the near term as new players take time to assess market movements,” said Mr. Leech.